The Attorney General, Mr Michael McDowell, has proposed further reform of the taxation system, suggesting the adoption of ambitious targets to bring the standard rate of tax to 16 per cent and the top rate to 33 per cent over a five-year period.
The Programme for Government aims to reduce the standard rate of taxation to 20 per cent by 2002 and the top rate to either 42 per cent or 40 per cent, depending on the economic circumstances. Mr McDowell called last night for a further five-year programme to achieve substantially lower taxation rates to underpin economic growth and the enterprise culture.
The Attorney General, who is a member of the Government and a former Progressive Democrats TD, said his comments should not be seen as related to the forthcoming Budget, or the policy issues that will be resolved by the Government in that context. "My perspective in discussing tax rates is a longer-term one," he said.
His remarks came two days after the PD leader and Tanaiste, Ms Harney, said she would be pressing for more income-tax cuts in the next Budget.
Addressing the Association of Chartered Certified Accountants (ACCA), Mr McDowell said he was one of the first people to articulate a low taxation rate philosophy in 1986. This had been strongly criticised. Those critics were a large group of orthodox economists who said it could not be done while a large number of ideologues vociferously stated that it should not be done.
"The ensuing 14 years should have seen off both camps. But, alas, remnants of each camp are still loitering round the edge of the political battlefield."
He added: "High tax rates for ordinary workers are inexcusable. This is especially so when the same tax laws permit the very wealthy to pay a much lower proportion of their income in taxes. The plan of the present Government to move the vast majority of taxpayers out of the top rate category is long overdue and nothing more than simple social justice."
He also called for changes to the legislative structure, referring to the impatience of many people with the slow progress on aspects of deregulation in sections of the economy.
He also called for modernisation of the legal process.
"A go-ahead enterprising society deserves a modern and effective legal system," he said.